Customer Analytics Can ‘Significantly’ Improve Bottom Line, but Most Brands Still Fall Short of Applying It in Real Time, per New Study
Harvard Business Review Analytic Services Study Provides Insight into Leading Analytical Strategies from H&R Block and TelefóNica Chile
With the convergence of digital technologies, such as artificial intelligence (AI) and the internet of things (IoT), opportunities are surging for brands to use advanced analytics to learn – and deliver on – what their customers expect in any given moment and place. A new study, conducted by Harvard Business Review Analytic Services and sponsored by SAS, Intel and Accenture Applied Intelligence, reports that companies using customer analytics are already achieving notable gains. Yet most believe themselves to be a far cry from effectively servicing their customers in real time.
According to the report, “Real-Time Analytics: The Key to Unlocking Customer Insights & Driving the Customer Experience,” 44 percent of respondents noted a “significant increase” in both growth and revenue generation as a result from their customer analytics efforts; 58 percent reported significant improvements in customer retention and loyalty. But only a surprisingly low number – 16 percent – considered their brands “very effective” at delivering real-time interactions across various channels, with 30 percent indicating they were “not effective at all.”
This raises red flags as the clear majority (60 percent) of business leaders surveyed believe the ability to deliver real-time customer interactions is “extremely important” today, and an even larger portion (79 percent) said it will be within two years.
“Real-time customer analytics are a strategic priority – now and in the future,” said Alex Clemente, Managing Director of Harvard Business Review Analytic Services. “The study shows that early adopters are already reaping tremendous benefits on the engagement and revenue front. That said, there are still significant obstacles to overcome. Strategic alignment and a willingness to constantly retune analytical methods are critical to those most successful in creating personalized customer experiences at scale.”
Building an analytics program capable of achieving real-time customer engagement has proven to be a roadblock for many organizations. Just one in ten respondents (11 percent) indicated they have a solution in place that enables this kind of customer interaction. Common barriers to entry are lack of infrastructure to access customer data, an organization’s culture, and the right technology, according to the study report.
“Operationalizing real-time customer analytics will require enterprises to modernize their data infrastructure,” said Maneeza Malik, global analytics and AI manager at Intel. Data silos and lack of a well-defined data strategy continues to be an impediment for many”.
Despite the challenges, organizations like H&R Block and Telefónica Chile understand that each touch point with a customer matters. Both companies continue to grow their real-time offerings in complexity and customization, and are seeing results. “Real time adds value,” Mike Weger, Manager of Direct Marketing and Corporate Analytics at H&R Block said in the report. “It’s not just about driving profits, but also increasing satisfaction, which leads to customer retention and ultimately better profitability.”
Who is responsible for customer experience? Survey indicates CMOs cook, CIOs shop for the groceries
To overcome the challenges inherent in becoming a real-time organization, transformation must start at the top and be a company-wide effort. As the survey results underlined, there are often multiple executive roles involved in the various pieces of customer experience strategy. For example, when asked who owns the organization’s overall customer experience strategy, 36 percent of respondents said the CMO and 25 percent said the CEO. But the responsibility shifted when asked who owns the supporting technology: CIO (30 percent), CTO (23 percent), CMO (12 percent), and CEO (6 percent).
“To differentiate their brands and deliver on customer needs, successful brands have a customer experience management strategy, at the heart of which is predictive analytics,” says Wilson Raj, Global Director of Customer Intelligence at SAS. “The issue becomes less about who owns customer experience, but how the entire C-suite executes on it. When CMOs, CIOs, and other C-level execs unify customer data and apply smart, robust analytics, they will inform marketing activities, uncover new opportunities and even influence the business well beyond marketing.”
Clearly, executive alignment in the organization is critical. Of those respondents who rated their real-time customer analytics efforts very effective, 64 percent indicated that their stakeholders are well aligned.
“Customers expect super-relevance, localization and tailored offers that fit their needs and preferences,” said Dr. Athina Kanioura, chief data scientist, Accenture Applied Intelligence. “Successful brands deliver on customer expectation by creating hyper-personalized, real-time customer experiences built on three capabilities: a unified customer data platform, prescriptive analytics powered by machine learning, and contextual interactions across digital and physical touchpoints. Real-time customer analytics is the platform that enable these strategies at scale.”